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The installment method of reporting income allows the profit on an installment sale to be taxed over the period that payments are received. The amount taxed in any year is equal to the payments received times the gross profit ratio (the total gross profit divided by the total contract price). However, the entire amount of any gain recaptured under Code Sec. 1245 or 1250 is reported in the year of sale regardless of whether any payment is received in that first year. Use of the installment method is mandatory unless the taxpayer elects not to report on the installment method.